The conservatives and the Social Democrats (SPD) agreed to seek a loosening of Germany's debt brake to allow higher defence spending, and to propose the creation of a 500 billion euro infrastructure fund,

Germany's Greens will negotiate hard before potentially giving their much-needed backing to debt reforms proposed by the conservatives and Social Democrats, parliamentary co-leader Katharina Droege said on Wednesday.

Germany's center-right Christian Democrats, under their leader and likely next chancellor, Friedrich Merz, have proposed a constitutional amendment to allow higher government borrowing to boost infrastructure and defense.

The prospective partners in Germany’s next government say they will seek to loosen the nation’s rules on running up debt to allow for higher defense spending.

The two political parties expected to form the next German government have agreed to significantly loosen the country’s constitutional restriction on deficits, enabling 1 trillion euros ($1.08 trillio

Germany has preached fiscal conservatism for years, but suddenly it’s taking the lead on pushing for European Union reforms aimed at freeing up more money for defense spending over the long term. A German envoy to the bloc has urged the bloc to change its budget rules in the face of geopolitical circumstances,